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HMRC internal manual

Double Taxation Relief Manual

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Double Taxation Relief Manual: Guidance by country: Switzerland: Interest

The effect of Article 11(5) of the agreement is that interest paid by a United Kingdom company in circumstances in which ICTA88/S209 (2)(e)(iv) and (v) would otherwise apply is not to be treated as a distribution. If, however, interest is paid to a Swiss resident company in which the participants in the management or control of the company paying the interest and the company receiving the interest are the same and more than 50 per cent of the voting power in the Swiss company is controlled by residents of the United Kingdom, such interest will continue to be treated as a distribution (Article 11(6)). But see DT215 for the position after FA 1995

The further agreement mentioned at DT18101 ensures that from April 1995 the United Kingdom can tax all the interest income of the United Kingdom permanent establishment of a Swiss company.